J.C. Penney (JCPN.Q) reported fiscal 2014 first-quarter earnings after the market closed today that beat Wall Street's estimates on both the top and bottom lines. For the period ended May 3, J.C. Penney reported a loss of $1.15 per share, which was $0.10 per share better than analysts had expected. Revenue came in at $2.8 billion in the period, up 6.3% from $2.6 billion during the same period a year ago. This topped analysts' estimates for quarterly sales of $2.7 billion.

Gross margins were another improvement for the struggling retailer, as gross margins climbed to 33.1%, up from 30.8% in the year-ago period. "We are very pleased to report that JCPenney delivered its second consecutive quarter of comparable store sales growth, as well as continued gross margin improvement," said Myron E. Ullman, J.C. Penney's chief executive. The department-store retailer said that a fresh merchandise mix and revamped messaging to its core customers helped drive better-than-expected sales in the quarter.

J.C. Penney's stock surged more than 20% in after-hours trading on the news. However, much of this gain was likely due to the high short interest in the stock -- more than 30% of J.C. Penney's shares are currently sold short. The stock was trading around $10.03 per share as of 4:50 p.m. today.